JER Partners acquired the 77-facility portfolio from Behrman Capital, a private equity investment firm in New York and San Francisco, under a consortium relationship with Formation Capital LLC, an operator and investor in senior housing based in Alpharetta, GA, and Jenkintown, PA.
JER and Formation plan to restructure Tandem into an owner of skilled nursing and other senior housing facilities. Tandem's senior management will maintain operational control of the facilities through a joint venture formed between Joe Conte, Tandem's president and COO, and CFO Gene Curcio, called Consulate Healthcare.
"JER is very pleased to be working with such outstanding operating and investment partners such as Tandem and Formation Capital as we continue to strategically invest in the senior care industry," says Cia Buckley, president of JER Partners' US Fund Business. "Both organizations are established market participants within this sector, and we look forward to continued success."
The deal points to a growing interest on the part of JER Partners in the healthcare asset class--one of the few in commercial real estate seen to deliver higher than average returns. In May, JER Partners said it would acquire $75 million of convertible preferred securities from Aviv Healthcare Properties Limited Partnership to finance the acquisition of triple-net leased healthcare facilities. JER Partners has traditionally invested in retail and hotel assets.
Grant G. Behrman, managing partner of Behrman Capital, tells GlobeSt.com that it has increased revenues 24-fold since its acquisition of Tandem in 1998 through its own strategy of organic growth and acquisition. The company's first acquisition had $25 million in revenues, he notes. Since then Behrman Capital has completed a total of 12 portfolio acquisitions bringing the total number of facilities under Tandem to 77, in 12 states. "We've accomplished the goals we set for ourselves and believe now is the right time to exit the company."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
